infoTECH News

Communications Systems (News - Alert), Inc. (NASDAQ:JCS) ("CSI" or the "Company"),
a global provider of physical connectivity infrastructure and services
for deployments of broadband networks, today announced financial results
for the second quarter ended June 30, 2014 (Q2 2014), including a
discussion of results of operations by segment.

CSI's (News - Alert) Interim Chief Executive Officer Roger H.D. Lacey commented, "Our
results for the second quarter reflect continuing growth at Suttle,
which achieved large gains in revenues, gross margin and operating
income, and significant progress at Transition Networks (News - Alert) and JDL
Technologies in repositioning for their future growth. We will continue
to implement our previously announced recovery plan over the next
several quarters.

"Revenues at Suttle (News - Alert) increased on both a year-over-year and sequential
quarterly basis due in large part to sales from core high-speed copper
connectivity products and from new FTTx (fiber to the home or node)
product platforms that we commenced shipping in April to a Tier 1
carrier. Suttle's performance should continue to improve throughout
2014, because of further sales of these and other recently developed
products. Suttle also recently introduced MediaMAX™, a new brand of
products that meet the growing need for wired and wireless high-speed,
high-quality triple play connectivity to all areas of the home and small
office, while lowering total cost of ownership. Revenues at Transition
Networks also increased on both a year-over-year and sequential
quarterly basis. Transition Networks remains focused on repositioning
its business and the continued refinement of its strategy should be
evident in succeeding quarters. Results at JDL Technologies continued to
reflect reduced federal and local funding for educational IT
investments, particularly as the E-Rate program is undergoing extensive
modernization. We are continuing to refine JDL Technologies' business
model to reduce its dependence on government funding, pursuing
opportunities to provide managed services and other network services."

Mr. Lacey concluded, "We ended the quarter in a strong financial
position, which will help support our ongoing growth initiatives. CSI's
balance sheet at June 30, 2014 included cash, cash equivalents, and
investments of $31.5 million, working capital of $61.8 million, and
stockholders' equity of $103.8 million."

Segment Financial Overview

See the Form 10Q to be filed on August 7, 2014
for more details of the quarter.

CSI operates through the following business units:

Suttle manufactures and markets copper and fiber connectivity systems,
enclosure systems, xDSL filters and splitters, and active technologies
for voice, data and video communications under the Suttle brand in the
United States and internationally;

Q2 2014 sales rose 37% from Q2 2013, due to revenue generated from new
FTTx product platforms. Sales to communication service providers rose
50% to $16 million from $10.6 million in Q2 2013, and comprised 84% of
total segment revenues, up from 77% in Q2 2013. This increase was due to
growth in core high-speed copper connectivity products and success in
securing new business in multiple FTTx domains.

Gross margin in Q2 2014 rose 62% to $6.3 million, or 33% of sales, from
$3.9 million, or 28% of sales, in Q2 2013. This was the result of the
introduction of new FTTx products, focused value engineering and cost
optimization efforts, and economies of scale.

Transition Networks

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2014

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2013

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2014

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2013

Sales

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$

11,567,000

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$

10,462,000

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$

21,317,000

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$

21,275,000

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Gross profit

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5,386,000

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5,675,000

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10,092,000

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11,396,000

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Operating (loss) income

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(223,000

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103,000

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(935,000

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(221,000

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Q2 2014 sales rose 11% from Q2 2013. Sales in North America increased
12% to $8.2 million due to improving conditions at key customers, and
Rest of World sales rose 19% to $2.2 million primarily due to higher
sales in Latin America. These improvements more than offset an 11% sales
decline in Europe, Middle East, Africa (EMEA).

Gross margin decreased 5% to $5.4 million, or 47% of sales, from $5.7
million, or 54% of sales, in Q2 2013, due to unfavorable product mix and
pricing pressure.

JDL Technologies

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June 30

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2013

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2014

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2013

Sales

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$

2,635,000

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$

7,623,000

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$

5,202,000

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$

11,850,000

Gross profit

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433,000

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1,991,000

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1,224,000

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2,731,000

Operating (loss) income

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(288,000

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1,328,000

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(181,000

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1,336,000

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Results at JDL Technologies continue to be affected by the federal
government's decision to withhold all priority two E-Rate funding this
year, as the E-Rate program undergoes an extensive modernization project
that will affect most key elements in the program. The E-Rate program
was developed to assist schools and libraries in the United States in
obtaining affordable telecommunications and Internet access.

Sales declined 65% to $2.6 million in Q2 2014 from $7.6 million in Q2
2013. Reflecting JDL Technologies' ongoing initiative to expand its
reach in the South Florida commercial market, sales to small- and
medium-sized commercial businesses (SMBs) increased by 36% to $0.6
million in Q2 2014 from $0.4 million in Q2 2013.

Q2 2014 gross margin declined 78% to $0.4 million, or 16% of sales, from
$2.0 million, or 26% of sales, in Q2 2013, primarily due to a change in
revenue mix led by an increase in infrastructure sales to Broward County
Public Schools, where margins have tended to be lower.

About Communications Systems

Communications Systems, Inc. provides physical connectivity
infrastructure and services for global deployments of broadband
networks. Focusing on innovative, cost-effective solutions, CSI provides
customers the ability to deliver, manage, and optimize their broadband
network services and architecture. From the integration of fiber optics
in any application and environment to efficient home voice and data
deployments to optimization of data and application access, CSI provides
the tools for maximum utilization of the network from the edge to the
user. With partners and customers in over 50 countries, CSI has built a
reputation as a reliable global innovator focusing on quality and
customer service.

Forward-Looking Statements

This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding future financial performance, future
growth and future acquisitions. These statements are based on
Communications Systems' current expectations or beliefs and are subject
to uncertainty and changes in circumstances. Actual results may vary
materially from those expressed or implied by the statements herein due
to changes in economic, business, competitive or regulatory factors, and
other risks and uncertainties affecting the operation of Communications
Systems' business. These risks, uncertainties and contingencies are
indicated from time to time in the Company's filings with the Securities
and Exchange Commission. The information set forth herein should be read
in light of such risks. Further, investors should keep in mind that the
Company's financial results in any particular period may not be
indicative of future results. Communications Systems is under no
obligation to, and expressly disclaims any obligation to, update or
alter its forward-looking statements, whether as a result of new
information, future events, changes in assumptions or otherwise.